First year of War in Ukraine and Global Economy Outlook

Yeon, WonHo

(whyeon@kiep.go.kr)

Research Fellow

Korea Institute for International Economic Policy

     In February 2022, the invasion of Ukraine by Russia resulting in economic sanctions against Russia led to a shock in Ukraine, Russia, and the global economy.

     First, it again acted as a negative factor for the global economy, recovering from COVID-19. Second, Not only threatened energy and food security, but it also accelerated inflation. Third, it increased the possibility of regionalization of the economy amid strategic competition between the U.S. and China.

     To overcome the current situation, the Korean government should promote long-term perspectives including decarbonization, transition to a digital society and fostering high-tech and strategic industry for its economic security.

     Furthermore, it is necessary to cooperate with its allies to avoid accelerating regionalization due to excessive emphasis on nationalism or security.